Question 1

In December 2022, Shaktikanta Das stepped down as Governor of the Reserve Bank of India. Who was appointed as his successor to lead the RBI?

Accepted Answer

Shaktikanta Das completed his 6-year term as RBI Governor and stepped down on 10 December 2022. Shri Sanjay Malhotra was appointed as the 25th Governor of the Reserve Bank of India, taking office on 10 December 2022. Sanjay Malhotra is an IAS officer of the 1994 batch and previously served as Deputy Governor of RBI. Therefore, the answer is Sanjay Malhotra. Option B is correct.

Question 2

In the 2019–2020 mega-bank consolidation exercise, which of the following mergers was NOT part of the RBI-mandated PSB (Public Sector Bank) amalgamation?

Accepted Answer

The RBI announced a four-phase consolidation plan in 2017, resulting in 10 PSBs merging into 4 mega-banks by 2020. The key mergers were: (1) Punjab National Bank + Oriental Bank of Commerce + United Bank of India; (2) Canara Bank + Syndicate Bank; (3) Union Bank of India + Andhra Bank + Corporation Bank; (4) Indian Bank + Allahabad Bank. The merger of Bank of Baroda with Vijaya Bank and Dena Bank occurred in 2019 as part of this consolidation. However, IDBI Bank was NOT part of this mega-bank consolidation exercise — it remained a separate entity (though later acquired by LIC in 2019). Therefore, answer is D.

Question 3

Which of the following statements regarding the first nationalisation of banks in India is CORRECT?

Accepted Answer

The first nationalisation of banks in India occurred on 19 July 1969 under Prime Minister Indira Gandhi. A total of 14 banks with deposits exceeding ₹50 crore were nationalised. This was a landmark event in Indian banking history, establishing state control over major commercial banks. The second nationalisation followed in 1980, when 6 additional banks were nationalised. Therefore, answer is B.

Question 4

The Imperial Bank of India, which was formed through the merger of three presidency banks, was later renamed to which institution in 1955?

Accepted Answer

The Imperial Bank of India was established in 1921 through the merger of the Bank of Bengal (1806), Bank of Bombay (1840), and Bank of Madras (1843). On 1 September 1955, the Imperial Bank of India was renamed and reconstituted as the State Bank of India (SBI) under the State Bank of India Act, 1955. SBI became the central bank's agent and the premier banking institution of India. Therefore, answer is A.

Question 5

Which of the following is NOT a characteristic of Regional Rural Banks (RRBs) as established under the RRB Act?

Accepted Answer

Regional Rural Banks (RRBs) were established in 1975 under the Regional Rural Banks Act, 1976. RRBs are sponsored by commercial banks and operate at the district level to serve rural areas. They are jointly owned by the Government of India, the sponsoring bank, and the state government (typically in a 50:25:25 ratio, though this has evolved). RRBs focus on agricultural lending and rural development. However, RRBs are NOT authorized to accept deposits without any limit — they operate under specific regulatory guidelines set by the RBI, including limits on deposit mobilization and lending. Therefore, answer is D.

Question 6

In which year were Payment Banks first licensed by the RBI, and what is a key operational characteristic that distinguishes them from commercial banks?

Accepted Answer

Payment Banks were first licensed by the RBI in 2015. The RBI issued guidelines for Payment Banks under the Payment Banks Regulations, 2015. A key distinguishing characteristic of Payment Banks is that they are NOT permitted to lend money or offer credit products — they can only accept deposits (up to ₹1 lakh per customer) and provide payment and settlement services. This is fundamentally different from commercial banks, which are authorized to lend. Therefore, answer is B.

Question 7

In the 2019–2020 mega-bank consolidation of Public Sector Banks (PSBs), which three banks were merged to form Punjab National Bank (PNB)?

Accepted Answer

The Government of India announced a major consolidation of PSBs in September 2019, reducing 27 PSBs to 12 and later to 4 mega-banks. One of the key mergers involved Oriental Bank of Commerce (OBC), United Bank of India (UBI), and Punjab National Bank (PNB) merging into PNB as the surviving entity. This merger was effective from April 1, 2020. The other major mergers were: Syndicate Bank + Canara Bank → Canara Bank; Andhra Bank + Corporation Bank + Union Bank → Union Bank of India. Therefore, answer is B.

Question 8

Which of the following statements about the merger of Syndicate Bank and Canara Bank is correct?

Accepted Answer

As part of the 2019–2020 PSB consolidation announced by the Government of India, Syndicate Bank was merged into Canara Bank, effective April 1, 2020. Canara Bank was the surviving entity and retained its name and identity. The merger was one of four major consolidations that reduced the number of PSBs. This merger was approved by the Union Cabinet and executed under the Banking Regulation Act, 1949. Therefore, answer is A.

Question 9

In the 2019–2020 PSB consolidation, which three banks merged to form Union Bank of India as the surviving entity?

Accepted Answer

As part of the Government of India's PSB consolidation announced in August 2019, three banks — Andhra Bank, Corporation Bank, and Union Bank of India — were merged, with Union Bank of India designated as the surviving entity. The merger became effective on April 1, 2020. Union Bank of India retained its name and identity and absorbed the operations of the other two banks. This was one of four major consolidations that reshaped the PSB landscape. Therefore, answer is C.

Question 10

Which of the following correctly identifies the surviving entity in the merger of Bank of Baroda, Vijaya Bank, and Dena Bank announced in the 2019 PSB consolidation?

Accepted Answer

In the 2019 PSB consolidation announced by the Government of India, Bank of Baroda, Vijaya Bank, and Dena Bank were merged, with Bank of Baroda designated as the surviving entity. The merger became effective on April 1, 2019. Bank of Baroda retained its name and identity and absorbed the operations of Vijaya Bank and Dena Bank. This was one of the earlier consolidations in the broader PSB restructuring initiative. Therefore, answer is B.

Question 11

The Imperial Bank of India, which was established in 1921 through the merger of three presidency banks, was later reconstituted as which institution in 1955?

Accepted Answer

The Imperial Bank of India was established on January 27, 1921, through the merger of three presidency banks: Bank of Bengal (1806), Bank of Bombay (1840), and Bank of Madras (1843). The Imperial Bank of India was later reconstituted and renamed as the State Bank of India (SBI) on May 1, 1955, following the State Bank of India Act, 1955. SBI became the central bank's agent and the premier banking institution of independent India. Therefore, answer is A.

Question 12

In 2019–2020, the Government of India initiated a major consolidation of public sector banks, merging 10 PSBs into 4 mega-banks. Which of the following was NOT one of the resulting mega-banks after this consolidation?

Accepted Answer

The 2019–2020 PSB merger exercise consolidated 10 public sector banks into 4 mega-banks: (1) State Bank of India (SBI), (2) Punjab National Bank (PNB) — formed by merger of Oriental Bank of Commerce, United Bank of India, and PNB, (3) Bank of Baroda (BoB), and (4) Canara Bank — formed by merger of Syndicate Bank and Canara Bank. Indian Bank and Union Bank of India were merged into one entity under the Union Bank umbrella. Central Bank of India remained independent as a separate PSB (not merged into a mega-bank). Therefore, Central Bank of India is the correct answer — it was not one of the 4 resulting mega-banks. Option C is correct.

Question 13

Under the Priority Sector Lending (PSL) framework applicable to domestic scheduled commercial banks, what is the minimum percentage of Adjusted Net Bank Credit (ANBC) that must be directed to priority sector?

Accepted Answer

The RBI mandates that domestic scheduled commercial banks must allocate a minimum of 40% of their Adjusted Net Bank Credit (ANBC) to priority sector lending. This includes sub-targets for agriculture (18%), weaker sections (10%), and micro and small enterprises (7.5%). Therefore, the answer is C.

Question 14

In the context of recent banking sector appointments, which of the following statements regarding the appointment of a new RBI Governor is CORRECT according to the RBI Act, 1934?

Accepted Answer

The RBI Governor is appointed by the Central Government on the recommendation of the RBI's Central Board. The Governor holds office for a term of 4 years from the date of assumption of office, and is eligible for reappointment. The appointment is made under Section 8 of the RBI Act, 1934. The Governor must be a person of ability, integrity, and standing. Therefore, the answer is A.

Question 15

In the 2019–2020 PSB consolidation exercise, which of the following mergers was NOT part of the RBI-mandated mega-bank formation?

Accepted Answer

The RBI announced a four-bank consolidation plan in August 2019 to create four mega-banks from ten PSBs. The three major mergers were: (1) Oriental Bank of Commerce + United Bank of India merged into Punjab National Bank (PNB); (2) Syndicate Bank merged into Canara Bank; (3) Andhra Bank + Corporation Bank merged into Union Bank of India. Bank of Baroda, Indian Bank, and Central Bank of India remained standalone. Therefore, the merger of Dena Bank into Bank of Baroda occurred in April 2018, which was a separate consolidation exercise prior to the 2019–2020 mega-bank plan. Option D (Dena Bank + Bank of Baroda) is the correct answer because it was executed before the 2019–2020 RBI consolidation framework.

Question 16

In the 2019–2020 PSB (Public Sector Bank) consolidation exercise, which of the following mergers was NOT part of the RBI-mandated mega-bank restructuring?

Accepted Answer

The RBI announced a four-bank consolidation plan in August 2019, effective April 1, 2020. The three major mergers were: (1) Oriental Bank of Commerce + United Bank of India merged into Punjab National Bank; (2) Syndicate Bank merged into Canara Bank; (3) Andhra Bank + Corporation Bank merged into Union Bank of India. The merger of Bank of Baroda with Vijaya Bank and Dena Bank occurred in 2019 but was a separate earlier consolidation. Therefore, answer is C.

Question 17

Which of the following statements regarding the appointment of the RBI Governor is INCORRECT under the RBI Act, 1934?

Accepted Answer

The RBI Governor is appointed by the Central Government on the recommendation of the Appointments Committee of the Cabinet (ACC). The Governor holds office for a term of 6 years or until the age of 65 years, whichever is earlier. The Governor is eligible for reappointment, but the total tenure cannot exceed 12 years. The RBI Act does NOT mandate that the Governor must be a career central banker — the appointment is discretionary by the Government. Therefore, answer is D.

Question 18

Under the Banking Regulation Act, 1949, which section governs the Statutory Liquidity Ratio (SLR) requirement for scheduled commercial banks?

Accepted Answer

The Statutory Liquidity Ratio (SLR) is prescribed under Section 24 of the Banking Regulation Act, 1949. This section empowers the RBI to prescribe the minimum percentage of net demand and time liabilities (NDTL) that scheduled commercial banks must maintain in the form of liquid assets (government securities, gold, or cash). The current SLR requirement is 18% of NDTL. Therefore, answer is B.

Question 19

In 2024, which of the following is NOT a correct statement regarding the appointment of Shaktikanta Das's successor as RBI Governor?

Accepted Answer

Sanjay Malhotra was appointed as the 26th Governor of the Reserve Bank of India, effective December 11, 2023, succeeding Shaktikanta Das. Malhotra is an IAS officer (1990 batch) with extensive experience in monetary policy, financial markets, and international finance. He previously served as Deputy Governor of RBI. However, the statement that Malhotra was appointed for a 5-year term is INCORRECT — the RBI Governor's term is 6 years or until age 65, whichever is earlier. Therefore, answer is C.

Question 20

Which of the following statements about Priority Sector Lending (PSL) targets for domestic scheduled commercial banks is INCORRECT?

Accepted Answer

Priority Sector Lending (PSL) requires domestic scheduled commercial banks to lend at least 40% of their Adjusted Net Bank Credit (ANBC) to priority sectors. Within this 40%, agriculture must receive at least 18% of ANBC, and weaker sections must receive at least 10% of ANBC. Small and marginal farmers must receive at least 8% of ANBC. However, the statement that 'weaker sections must receive at least 15% of ANBC' is INCORRECT — the actual target is 10%. Therefore, answer is C.

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